Can you create effective pricing strategies if you don’t know who your consumer is and how they behave? Not really.
The first step toward better understanding your consumer is to identify your buyer personas. Consumers evolve and, if you know them well, it is easier to follow the evolution of their behavior to build your pricing strategies in real-time (or almost).
Understanding the Consumer
To start, look at the demographic information you already have in your own databases, such as age, profession, and location. By extrapolating this data, you can have a consumer profile that fits some business needs.
However, shoppers have changed, and their demographic profile is no longer enough to identify the touchpoints that create long-term relationships with your customers. So, how can you do it?
You can use third-party data to supplement the information in your database. You will get to know your customers in all aspects of their digital life, improving conversion rates.
Pay special attention to how you treat the data and explain your data collection processes in a transparent way to your customers. Eighty-five percent of consumers do not proceed with a purchase if they believe that their data is not being used well.
The Most Relevant Data to Analyze Consumer Behavior
You can begin to analyze customer behavior once you have your buyer personas. Here are a few data points to capture.
Talk to Your Customers
Your main source of information is your own customers, so ask them directly. Find a way to interact with them so that they answer your questions honestly—this will help you get to know them better.
Combine Quantitative and Qualitative Data
Both are equally important when studying the behavior of your customers. Remember that there is life beyond metrics.
Learn the Customer Journey
Your customer’s journey is not just the number of clicks they make before purchasing. It includes all interactions with your brand and/or product.
What are their preferred social networks? Do they read your blogs? How sensitive are they to prices? Do they keep a full cart for a long time and then abandon it? There are plenty of questions to ask here.
What you can do is make a heat map and analyze where your shoppers stand. This will help you understand how they behave and, at the same time, it will allow you to improve the experience on your eCommerce site.
When you have all this data, the time has come to look at the big picture and build your pricing strategies.
Your customer’s journey is not just the number of clicks they make before purchasing. It includes all interactions with your brand and/or product.
Models of Consumer Behavior
Other valuable tools when building pricing strategies are consumer behavior models. Thanks to these, you will be able to understand how shoppers acquire the products or services they need and use this knowledge to fine-tune your pricing strategies.
Economic Model
The purchasing power of your customers will determine their purchase decision. The length of the decision-making process either increases or decreases depending on the price of the product. At a higher price, customers tend to think more about buying. When the price is lower, impulse buying is much more common.
Once again, it’s important that you observe your competition and that you correctly segment your customers by purchasing power to offer them the products that best match their situation.
Learning Model
This consumer behavior model is based on Pavlov’s model of learning and looks at the most basic needs that lead us to act. Eat, sleep, shelter, and so on. If you identify what basic need your products relate to, you can capitalize on it in advertising and marketing campaigns to create demand from your shoppers.
Sociological Model
We are social animals and our behavior adapts to the social group around us. In this model, many of the purchases people make that don’t satisfy basic needs are instead motivated by the desire for prestige. Your products might fit into this model by elevating the social standing of the customer.
Understanding the behavior of your customers is not an easy task, but the more you know them, the better you can anticipate changes in their needs to increase sales and develop effective pricing strategies.
